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HomeMy WebLinkAbout2009-5744CACH, LLC, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. CIVIL ACTION COURTNEY A. PARKER, Defendant NO. 2009 — 5744 CIVIL TERM IN RE: DEFENDANT'S PRELIMINARY OBJECTIONS TO PLAINTIFF'S AMENDED COMPLAINT BEFORE HESS, P.J., and OLER, J. OPINION and ORDER OF COURT OLER, J., September 13, 2011. In this debt collection action against a credit card debtor, Plaintiff CACH, LLC has sued Defendant for an allegedly delinquent credit card balance in the amount of $9,991.60. For disposition at this time are preliminary objections filed by Defendant to Plaintiff s Amended Complaint. Oral argument was held on August 26, 2011. For the reasons stated in this opinion, Defendant's Preliminary Objections will be sustained. STATEMENT OF FACTS In this case, Plaintiff filed a seven -paragraph complaint on August 19, 2009, which alleged, inter alia, that Plaintiff was the Assignee and Successor in Interest of account number 4888934999007056, which was issued to Defendant by Bank of America, N.A., and that Defendant had an unpaid balance of $9,919.92.1 To its Complaint, Plaintiff attached a document entitled "Statement of Account, ,2 which displayed the following information: STATEMENT OF ACCOUNT Debtor's Name: COURTNEY A PARKER Account Number: 4888934999007056 Original Creditor: BANK OF AMERICA, N.A. ' Plaintiff's Complaint, ¶¶3, 5, filed August 19, 2009. 2 Statement of Account, attached to Plaintiffs Complaint, filed August 19, 2009. Balance Due: $9,919.92 Our File No.: 2221373 On September 14, 2009, Defendant filed Preliminary Objections to Plaintiff's Complaint .4 In response, Plaintiff filed a six -paragraph amended complaint on October 12, 2009, which sought relief in the amount of $9,991.60, and attached thereto a document entitled "COLLECT AMERICA, LTD. Litigation and Recovery Department, Offer to Place Account for Litigation on Contingency Fee Basis,,,5 as well as two billing statements, the first of which was dated September 2008,6 and the second, May 2008.7 On October 27, 2009, Defendant filed Preliminary Objections to the Amended Complaint in the form of (1) a demurrer based on Plaintiffs failure to attach to its Amended Complaint a copy of the cardholder agreement between Defendant and the original creditor;$ (2) a motion for a more specific pleading based on Plaintiffs failure to attach to its Amended Complaint statements supporting its claim for relief,9 (3) a motion to dismiss for failure to conform to rule of court, based on Plaintiffs failure to attach to its Amended Complaint an assignment establishing Plaintiff as a real party in interest; 10 and (4) a s Statement of Account, attached to Plaintiff's Complaint, filed August 19, 2009. 4 Defendant's Preliminary Objections to Complaint, filed September 14, 2009. s Exhibit A ("Offer to Place Account for Litigation on Contingency Fee Basis"), attached to Plaintiff's Amended Complaint, filed October 12, 2009. 6 The September 2008 Statement contained the following information, which the court considers pertinent to the instant action: (1) Name: Courtney A Parker; (2) Account Number: 4356 0233 0037 6021; (3) New Balance Total: $8,188.21; (4) Total Minimum Payment Due: $2,096.00. Bank of America Statement, dated September 2008, attached to Plaintiff's Amended Complaint, filed October 12, 2009. The May 2008 Statement contained the following information, which the court considers pertinent to the instant action: (1) Name: Courtney A Parker; (2) Account Number: 4356 0233 0037 6021; (3) New Balance Total: $7,530.57; (4) Total Minimum Payment Due: $1,174.00. Bank of America Statement, dated May 2008, attached to Plaintiff's Amended Complaint, filed October 12, 2009. s Defendant's Preliminary Objections to Plaintiff's Amended Complaint, ¶¶1-7, filed October 27, 2009; see Defendant's Brief in Support of Preliminary Objections to Plaintiff's Amended Complaint, dated August 1, 2011. 9 Defendant's Preliminary Objections to Plaintiff's Amended Complaint, ¶¶8-13, filed October 27, 2009. 10 Defendant's Preliminary Objections to Plaintiff's Amended Complaint, ¶¶14-15, filed October 27, 2009. 2 motion to strike for improper verification. 11 Both Plaintiff and Defendants filed briefs in compliance with local rules of court, and oral argument was held on August 26, 2011. DISCUSSION Preliminary objections, general rule. Defendant in the case has filed preliminary objections based upon various purported violations of the Pennsylvania Rules of Civil Procedure. Based on these preliminary objections, Defendant has asked the court to dismiss Plaintiff's Amended Complaint with prejudice. With respect to preliminary objections in the form of a demurrer, any doubt should be resolved against the objecting party. Koken v. Steinberg, 825 A.2d 723, 726 (Pa. Cmwlth. 2003). Failure to Attach the Written Agreement Failure to conform to law or rule of court. Defendant's first preliminary objection argues that the alleged debt is based upon a written cardholder agreement, and that Plaintiff failed to attach a copy of the document to the complaint.12 As required by Pennsylvania Rules of Civil Procedure 1019(h) and 1019(1), when any claim or defense is based upon an agreement, and the agreement is in writing, the agreement between the plaintiff and the defendant must be attached to the pleading. Pa. R.C.P. No. 1019(h); Pa. R.C.P. No. 1019(1). If the writing is not available to the pleader, the pleader may instead provide the reason for the unavailability of the writing and state the substance of the writing in the pleading. See Pa. R.C.P. No 1019(1); Marine Bank v. Orlando, 25 Pa. D. & C. 3d 264 (Pa. Com. Pl. Erie Cnty. 1982) (in collection cases dealing with bank credit cards, Rule 1019(1) is complied with by attaching to the complaint a copy of the issuer/cardholder agreement.). The failure to produce the cardholder agreement may establish a meritorious defense and a basis for preliminary objections pursuant to Rules of Civil Procedure 1019(1) and 1028(a)(2). Atlantic Credit and Finance, Inc. v. Giuliana, 2003 PA Super 259, 829 A.2d 340. In Giuliana, the Superior Court reaffirmed this attachment " Defendant's Preliminary Objections to Plaintiff's Amended Complaint, ¶¶16-17, filed October 27, 2009. 12 Defendant's Preliminary Objections to Plaintiff's Amended Complaint, ¶¶1-7, filed October 27, 2009. 3 requirement when it held that a creditor must "attach the writings which assertedly establish [the creditor's] right to a judgment." Atlantic Credit and Finance, Inc. v. Giuliana, 2003 PA Super 259, ¶13, 829 A.2d 340, 345. The issue has similarly been addressed by another court in Marine Bank v. Orlando, 25 Pa. D. & C. 3d 264 (Pa. Com. Pl. Erie Cnty. 1982). The Marine Bank court reasoned that the cardholder may incur obligations and liabilities for the purchase of goods or services, and that the exact terms of the cardholder agreement represent the criteria relating to a claim that the cardholder has defaulted. Id. at 265. Similarly, in Target Nat. Bank v. Kilbride, 10 Pa. D. & C. 5th 489 (Pa. Com. Pl. Centre Cnty. 2010), the Centre County Court of Common Pleas held that, when the plaintiff's claims are based upon a written agreement, the Plaintiff must attach the agreement to the complaint. Id. In the event that the writing is not available to the plaintiff, the court held, the plaintiff must provide the reasons for the unavailability of the writing and state the substance of the written agreement in its pleading. Id. Application of law. In the case sub judice, the Plaintiff's pleading lacks sufficient indicia of an agreement between Defendant and a creditor. Furthermore, the two isolated statements that Plaintiff attached to its Amended Complaint, both of which displayed Defendant's name but contained an account number other than the one identified by Plaintiff in its complaint, or displayed on the "Offer to Place Account for Litigation on Contingency Fee Basis," failed to adequately support, even for pleading purposes, the proposition that the relief requested was appropriate, and failed to provide any documentation to explain how the amount requested was calculated. 13 Additionally, in the absence of an attached agreement between Defendant and the creditor, the "Total Minimum Payment Due," as indicated on the most recent statement attached to Plaintiff s Amended Complaint, can not be reconciled with the different amount demanded in the is Compare Plaintiff's Amended Complaint, filed September 14, 2009 (requesting judgment in the amount of $9,991.60) with Bank of America Statement, dated September 2008, attached to Plaintiff's Amended Complaint, filed October 12, 2009 (displaying "New Balance Total" in the amount of $8,188.21). 11 Amended Complaint's ad damnum clause. 14 As stated in its Amended Complaint, Plaintiff's claim is based upon an alleged agreement between Defendant and an original creditor, Bank of America. 15 However, Plaintiff has failed to attach the writing that gave rise to its claim, and, alternatively, has failed to address the absence of a written agreement and set forth the substance of the said agreement, which is otherwise required by Rule 1019(1). Accordingly, Defendant's preliminary objection for failure to conform to rule of court will be sustained. Failure To Adequately Plead Plaintiff's Status As a Real Party in Interest Real party in interest. Defendant's second preliminary objection contends that Plaintiff has not sufficiently pled that it is a real party in interest. Defendant argues that Plaintiff violated Rule of Civil Procedure 1019(1) because it failed to attach necessary documents to its Amended Complaint to sufficiently plead that Defendant's account was assigned to Plaintiff. 16 "[Rule 1019] requires that, in a credit card case based upon an assignment, the relevant assignments showing the chain of ownership for the account from the originator to current holder must be attached to the complaint." Remit Corp. v. Miller, 5 Pa. D. & C. 5th 43 (Pa. Com. Pl. Centre Cnty. 2008). In Giuliana, supra, the Superior Court established the necessary documentation that must be attached to a complaint in debt collection cases involving the assignment of a defendant's account to another financial institution. The Superior Court stated that the failure to attach the documents necessary to establish the assignee's right to the judgment, including the documents evidencing the assignment, was fatal to the claims set forth by the assignee. Giuliana, 2003 PA Super 259 at ¶13, 829 A.2d at 345. Where a plaintiff is not the defendant's original creditor, the complaint, as a general rule, must include a writing evidencing the assignment of the defendant's account from the original creditor to plaintiff. See Atlantic Credit and Finance, Inc. v. Giuliana, 14 Bank of America Statement, dated September 2008, attached to Plaintiff's Amended Complaint, filed October 12, 2009 (displaying "Total Minimum Payment Due" in the amount of $2,096.00). " Plaintiff's Amended Complaint, filed October 12, 2009. 16 Defendant's Preliminary Objections to Plaintiff's Amended Complaint, filed October 27, 2009. 5 2003 PA Super 259, ¶13, 829 A.2d 340, 345; Remit Corp. v. Miller, 5 Pa. D. & C. 5th 43 (Pa. Com. Pl. Centre Cnty. 2008); Arrow Financial Servs. v. Witmer, 59 Cumb. L. J. 154 (Pa. Com. Pl. Cumb. Cnty 20 10) (Ebert, J.); LVNV Funding, LLC v. Joy A. Murlatt, No. 2010-3040 Civ. T. (Pa. Com. Pl. Cumb. Cnty. 2011) (slip. op.) (Masland, J.). Without the attachment of such a document, or an explanation as to the reason for the document's absence along with the substance of the agreement, a plaintiff fails to sufficiently plead its status as a real party in interest to a judgment on the debt. See Atlantic Credit and Finance, Inc. v. Giuliana, 2003 PA Super 259, ¶¶12-13, 829 A.2d 340, 345; Remit Corp. v. Miller, 5 Pa. D. & C. 5th 43 (Pa. Com. Pl. Centre Cnty. 2008). Application of law. In the matter sub judice, Plaintiff's Amended Complaint contains a single document purporting to establish an assignment. An examination of the document, however, reveals that it is nothing of the sort. By the court's reading, the document appears to be nothing more than a contingency fee arrangement between Plaintiff and Apothaker & Associates for a Bank of America account, numbered 4888934999007056.17 The only signature appearing on the document is that of Michelle Holderness, Esquire, who may possibly be employed by Collect America, LTD rather than the original creditor.'8 Additionally, despite Plaintiff's contention to the contrary, as stated in its argument court brief, a document "titled `Affidavit of Claim and Certification of Debt[,]' [purporting to evidence] the sale, transfer and assignment of [Defendant's] account from the original creditor to Plaintiff,"19 is not part of the record .20 Nor has the court been able 17 This account number is the same number that Plaintiff referred to in its Amended Complaint, but different from the number reflected on the attached statements. Compare Plaintiff's Amended Complaint, ¶¶3, 4, filed October 12, 2009 with "Offer to Place Account for Litigation on Contingency Fee Basis," attached to Plaintiff's Amended Complaint, filed October 12, 2009 with Bank of American Statements, dated September 2008 and May 2008, attached to Plaintiff's Amended Complaint, filed October 12, 2009. " "Offer to Place Account for Litigation on Contingency Fee Basis," attached to Plaintiff's Amended Complaint, filed October 12, 2009. 19 Plaintiff's Brief in Response to Defendant's Preliminary Objections to Plaintiff's Amended Complaint, dated January 7, 2010, at *2. 21 to locate in the record the "clearly state[d] identifying information for the account, including the three (3) account numbers which all reference [Defendant's] account," or the location of the "open date of the account and the outstanding balance on the account as of the date of sale."21 Plaintiff has failed to attach adequate indicia of assignment of the purported credit card account, or to explain the absence thereof, and has therefore failed to sufficiently plead its status as a real party in interest to this litigation. For the foregoing reasons, Defendant's second preliminary objection will be sustained. Lack of Specificity in Pleading Defendant argues that Plaintiffs Amended Complaint is insufficiently specific because it does not meet the requirements of Rule 1019 (averments of special damages be specifically stated).22 Plaintiff maintains it has pled facts with sufficient specificity to allow Defendant to answer the complaint. Sufficiency of pleadings. In determining sufficiency of the pleadings in a complaint, the court will consider "whether the plaintiffs complaint informs the defendant with accuracy and completeness of the specific basis on which recovery is sought so that he may know without question upon what grounds to make his defense." Rambo v. Green, 2006 PA Super 231, ¶11, 906 A.2d 1232, 1236. Rule 1019(a) states that "[t]he material facts on which a cause of action or defense is based shall be stated in a concise and summary form." Rule 1019(f) states that "[a]verments of time, place and items of special damage shall be specifically stated." 20 See Erie Indemnity Co. v. Coal Operators Casualty Co, 441 Pa. 261, 265, 272 A.2d 463, 466-67 (1971); Cumulus Broadcasting v. Bond, et al, 52 Cumb. 108 (Pa. Ct. Com. Pl. Cumb. Cnty. 2003) (Oler, J.) (Pursuant to local rules, briefs are not part of the record and a court may not consider facts not part of the record). 21 Plaintiff's Brief in Response to Defendant's Preliminary Objections to Plaintiff's Amended Complaint, dated January 7, 2010, at *2-3. Additionally, although Defendant's brief argues that the "client affidavit states that the original contract in this matter has been destroyed or is no longer accessible to affiant" and that the client affidavit "is to be treated as the original document for all purposes," the "client affidavit" is not found in the record. See Plaintiff's Brief in Response to Defendant's Preliminary Objections to Plaintiff's Amended Complaint, dated January 7, 2010, at *3. 22 Defendant's Preliminary Objections to Plaintiff's Amended Complaint, ¶¶8-13, filed October 27, 2009 7 Defendant argues that, in World Wide Asset Purchasing, LLC v. Stern, 153 Pitts. L.J. 111 (Pa. Ct. Com. Pl. Allegh. Cnty. 2004), the Honorable Stanton Wettick provided a list of items that must be included in a complaint for an action to collect on consumer credit card debt as follows: Amounts of the charges that are part of the claim, the dates of the charges, credit for payments if any, dates and amounts of interest charges, and dates and amounts of other charges. The complaint should contain sufficient documentation and allegations to permit a defendant to calculate the total amount of damages that are allegedly due by reading the documents attached to the complaint and the allegations within the complaint. Worldwide Asset Purchasing, 153 Pitts. Leg. J. 111, at *4 (Pa. Ct. Com. Pl. Allegh. Cnty. 2004) (Wettick, J.). Additionally, in Marine Bank v. Orlando, 25 Pa. D. & C. 3d 264 (Pa. Com. Pl. Erie Cnty. 1982), the Erie County Court of Common Pleas addressed the issue of specificity in the context of consumer credit card debt collection cases. The court held that, although Rule 1019(f) requires only items of special damages to be specifically stated, in the context of credit cards, "the plaintiff must particularize general damage as far as is reasonably practicable." Marine Bank v. Orlando, 25 Pa. D. & C. 3d 264, 268- 69 (Pa. Com. Pl. Erie Cnty. 1982); see Remit Corp. v. Miller, 5 Pa. D. & C. 5th 43 (Pa. Com. Pl. Centre Cnty. 2008). Application of law. While this court declines to set forth the precise number of monthly billing statements that must be included in a complaint in a credit card debt collection case to satisfy the pleading requirements of Rule 1019, it is clear that the two isolated and uninformative billing statements attached to the present pleading 23 cannot be considered sufficient, especially considering that Defendant and Plaintiff, as a third -party debt purchaser, had not entered into an agreement between themselves. Based upon the unique circumstances of this case, Defendant's third preliminary objection will be sustained. 23 Neither the September 2008 nor the May 2008 billing statement displayed a successful transaction made by Defendant. However, the statements do display charges against Defendant's account that had been made by the creditor itself, in the form of two late fees, two returned payments, one returned check fee, and one over -limit fee. See Bank of America Statements, dated September 2008 and May 2008, attached to Plaintiff's Amended Complaint, October 12, 2009. Improper Verification Improper verification. Defendant's fourth preliminary objection contends that Plaintiff failed to verify properly the Amended Complaint, in accordance with Pennsylvania Rule of Civil Procedure 1024(c), which provides as follows: The verification shall be made by one or more of the parties filing the pleadings unless all the parties (1) lack sufficient knowledge or information, or (2) are outside the jurisdiction of the court and the verification of none of them can be obtained within the time allowed for filing the pleading. In such cases, the verification may be made by any person having sufficient knowledge or information and belief and shall set forth the source of the person's information as to matters not stated upon his or her own knowledge and the reason why the verification is not made by a party. Pa. R.C.P. No. 1024(c). Application of law. Plaintiff's Amended Complaint was not verified by a party filing the pleading, but instead was verified by Plaintiff's counsel. The Amended Complaint lacked any averment that either of the two exceptions provided for in Rule 1024(c) applied in this case. Furthermore, no reason was supplied in the Amended Complaint as to why the verification was not made by a party. The verification does state that counsel for Plaintiff was "authorized to take [the] Verification, and that the statements made in the [Amended Complaint were] true and correct to the best of [her] knowledge, information, and belief. ,24 However, there is nothing in the record to indicate that there is any connection between CACH, LLC and the law firm of Apothaker and Associates, P.C.,25 which would explain the circumstances under which Kimberly F. Scian, Esquire, was authorized to execute a verification on Plaintiff's behalf. Accordingly, as the Amended Complaint fails to aver circumstances that would implicate a Rule 1024(c) exception, the verification supplied by Plaintiff's counsel must be considered inadequate, and relief will be afforded to Defendant on this preliminary objection. For the reasons set forth in this opinion, the following order will be entered: 24 Plaintiff's Amended Complaint, Verification, filed October 12, 2009. 25 In its signature block, Apothaker and Associates identifies itself as a "Law Firm Engaged in Debt Collection." 7 ORDER OF COURT AND NOW, this 13th day of September, 2011, upon consideration of Defendant's Preliminary Objections to Plaintiff's Amended Complaint, following oral argument held on August 26, 2011, and for the reasons stated in the accompanying opinion, Defendant's preliminary objections are sustained to the extent that Plaintiff's Amended Complaint is stricken. The court grants Plaintiff leave to file an amended complaint in accordance with the accompanying opinion within 20 days of the date of this order. Kimberly F. Scian, Esq. Apothaker & Associates, P.C. 520 Fellowship Road, C306 Mount Laurel, NJ 08054 Attorney for Plaintiff Geoffrey M. Biringer, Esq. MidPenn Legal Services 401 E. Louther Street Carlisle, PA 17013 Nancy L. Datres, Esq. MidPenn Legal Services 213-A North Front Street Harrisburg, PA 17101 Attorneys for Defendant BY THE COURT, s/ J. Wesley Oler, Jr. J. Wesley Oler, Jr., J. 10 CACH, LLC, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. CIVIL ACTION COURTNEY A. PARKER, Defendant NO. 2009 — 5744 CIVIL TERM IN RE: DEFENDANT'S PRELIMINARY OBJECTIONS TO PLAINTIFF'S AMENDED COMPLAINT BEFORE HESS, P.J., and OLER, J. ORDER OF COURT AND NOW, this 13th day of September, 2011, upon consideration of Defendant's Preliminary Objections to Plaintiff's Amended Complaint, following oral argument held on August 26, 2011, and for the reasons stated in the accompanying opinion, Defendant's preliminary objections are sustained to the extent that Plaintiff's Amended Complaint is stricken. The court grants Plaintiff leave to file an amended complaint in accordance with the accompanying opinion within 20 days of the date of this order. BY THE COURT, J. Wesley Oler, Jr., J. Kimberly F. Scian, Esq. Apothaker & Associates, P.C. 520 Fellowship Road, C306 Mount Laurel, NJ 08054 Attorney for Plaintiff Geoffrey M. Biringer, Esq. MidPenn Legal Services 401 E. Louther Street Carlisle, PA 17013 Nancy L. Datres, Esq. MidPenn Legal Services 213-A North Front Street Harrisburg, PA 17101 Attorneys for Defendant